vol. viii, #39 October 21, 2002

* Voice mail hell: How to make contact with buyers * Retailers drive vendor consolidation * Réno-Dépôt's international purchases growing gradually * Masonite head gets award * U.S. housing starts jump in September

"Far too much reorganization goes on all the time. Organizitis is like a spastic colon." - Peter Drucker (U.S. business philosopher and author)
Montréal, QC - As a division of Castorama Group, Réno-Dépôt is owned by Kingfisher plc, the number-three home improvement retailer in the world. But it's also part of a buying team that's looking for synergies among all of Castorama Group's retail banners, which include B&Q in the U.K., Castorama in Europe, Brico-Depot in France and Réno-Dépôt and Building Box in Canada. "We're trying to bring the companies together," says Joseph Piro, general merchandising manager for Réno-Dépôt, " but it's not an easy task, as each company has its own way of buying." Piro was speaking at the "Meet the Buyers Seminar" hosted by Hardlines, in association with ADMACQ - the Québec association of building supply dealers - and the Canadian Hardware and Building Materials Show. Currently, Castorama is targetting categories such as flooring, tiles and some outdoor furniture. About 5% of Réno-Dépôt's total purchases are done on a consolidated basis with its European partner. In Canada, collective opportunities are overseen by Richard Martoccia, vice-president of synergies, a former vp of merchandising for Réno-Dépôt.

Montréal, QC - "Hi, you've reached the voice mail of Al Lynn. Please leave a detailed message after the tone…" The opening words from Sodisco-Howden Group's merchandising director brought a roar of laughter from the vendors gathered last week at the Hardlines "Meet the Buyers Seminar." They were there to hear from some of Canada's top buyers, and Lynn's mock voice message was a familiar reminder of the challenges of getting through to buyers.

Along with Christian Nadeau, who does the hardware buying at Le Groupe BMR, Lynn represented the needs of the independents at the seminar. Joseph Piro, general merchandising manager for Réno-Dépôt, spoke on behalf of the big box sector. The challenge for vendors to make contact has been especially tough at Sodisco-Howden, where 70% of the buying team is new within the last six months. Lynn had some tips for cutting through the voice mail clutter: * If you're a listed vendor, say so in the message. Then specify which of Sodisco-Howden's three distribution centres you're listed in. * If you're not currently a listed vendor, say something about your product that will make you stand out from the other 50 already received that morning. * Use email. When you land an appointment, follow up the phone call by emailing an agenda of the upcoming meeting, stating your goals and objectives. One thing that both Nadeau and Lynn stressed in their presentations was the need to be able to close the deal on the spot. If an agent or rep is coming in, they have to be prepared to handle all aspects of the negotiation. If not, the deal could be lost.
Toronto, ON - Pricing pressure from competitors will never go away, but lately it appears to be easing, report many independents. As big boxes look for bigger profits, the brutal low-balling that typified their entry into markets such as Vancouver, Calgary and Toronto is easing. Second, independents are getting better at competing - including banding together in more strategic ways to cut deals that keep them within a few percent of the big boxes. Pat Bennett, vice-president sales for Ace Hardware Canada, says Home Depot has led the way to better margins with more emphasis on profitable selling. "There's not a price game anymore," says Bennett, who is himself a former Home Depot Canada vice-president. "Big boxes are going after margins, not sales." Don Nash, president of Homecare Building Centres in Ontario, agrees. Everyone is looking, not only for more sales, but for increased margins, he says. "We're keeping our guys really competitive on pricing." He cites cities such as Owen Sound, Windsor and Sudbury, all recent targets of big boxes. "They're coming into all these communities, and we're still up 15%." Smaller retailers can leverage other advantages, says Bennett. "Independents can compete with fair pricing, but also with knowledgeable customer service," he says. "Our independents are saying that they have had to raise the retail price on more than half their items because Home Depot is so high now." In Atlantic Canada, where Kent has both big boxes and traditional format building centres, dealers are finding the pricing easier. "We love competing against Kent!" says one Pro dealer in New Brunswick. Dealers are also getting better at holding their own when a big box comes to town. "Certainly, they're tough competition," Nash explains. "But we've learned how to compete against them in terms of the customers." For example, when competing on bids to supply materials, dealers look to point out differences in product quality or specs to potential customers. They also look at other, less obvious factors, such as delivery policies and timing issues, when quoting customers.
Canadian Tire 33.15 22.21 29.99
Canfor 11.70 6.83 7.90
Emco 12.77 4.70 11.00
Goodfellow 13.99 8.00 11.75
Home Depot 52.60 23.18 30.41
Hudson's Bay 15.95 5.87 6.50
Lowe's Cos. 49.99 32.40 44.15
Sears Canada 25.10 13.03 16.05
Sodisco-Howden 2.20 0.90 1.39
Taiga Forest 7.00 4.55 6.55
West Fraser 44.42 27.36 32.45
The Outstanding Retailer Awards program is taking entries for this year's judging. The awards, put on by Hardware Merchandising, honour excellence in retailing by hardware and home improvement dealers across Canada. These are truly the Academy Awards of this industry and I encourage every retail group to submit entries. Deadline for submissions is November 15, 2002. Contact Rob Gerlsbeck, Editor of Hardware Merchandising, for more info: 416-596-5258; rob@rmpublishing.com. The winners will be honoured at the first-ever Industry Awards Breakfast, which kicks off the Canadian Hardware and Building Materials Show on February 2, 2003.Don't miss Practical World 2003, the Cologne International Hardware Fair/DIY'Tec. The 2003 show is March 9-12. For show information, contact Barbara Hills at 416-598-3343 or email colognet@idirect.com. To book your flight and hotel, call Carol-Ann Itel at Trade Show Travel, 1-877-873-7469 or email tradeshowtravel@shaw.ca .
Home Depot Canada will open its third store in the Waterloo region of Southwestern Ontario with the announcement of a store in Cambridge. It will be about about five kilometres to the west of an existing Kitchener store, and near a Building Box in a neighbouring power centre. Waterloo, ON city council has bowed to the forces of Wal-Mart, saying it can't afford a legal battle to oppose the retailer's bid for a spot in a power centre on the north end of the city. The site will be close to the town of St. Jacob's, home of Home Hardware Stores Ltd. Wal-Mart is currently in the courts trying to get approval for a store in the nearby town of Guelph, a community that has fought the Wal-Mart application for years. Sears Canada reported total revenues for the second quarter of $1.593 billion, up 0.5% from $1.585 billion for the same period last year. Merchandise sales increased 0.7% and same-store sales fell 3.0%. Earnings for the quarter, excluding non-comparable items, were $24.8 million, compared with $8.8 million. Do it Best Corp. handed out its largest rebate ever at its October Market this past weekend in Indianapolis, IN. The co-op distributed a total of US$95.7 million in rebates to its dealers, reflecting dealer purchases of US$2.4 billion. It has 4,300 co-op members worldwide, but none in Canada (Sodisco-Howden Group's 53 Do it centres are not affiliated with Do it Best). Kingfisher plc has increased its ownership in Hornbach, Germany's leading DIY big box retailer, with the purchase of 17.4% of Hornbach's non-voting preferred shares for €36.2 million in cash. This gives Kingfisher, the world's third largest home improvement retailer, a total interest in the business of 21.2%. Taiga Forest Products Ltd. recorded 2Q sales of $241.6 million, compared with $230.1 million for the same period in the previous year. Earnings for the quarter were $6.6 million, compared with $1.1 million. Sales for the six months ended September 30 were $499.8 million, up from $465.6 million in 2001. Earnings for the same period went from $3.8 million in 2000 to $8.1 million. Tembec has announced plans to shut down its Kirkland Lake, ON sawmill indefinitely as a result of the weakness of the softwood lumber market and U.S. countervailing and antidumping duties. The closure will take effect within the next month and will affect 23 employees in addition to 38 already laid off. Camco announced net income of $1.9 million for the third quarter ending September 21, 2002, up from a net loss of $0.1 million for the same period last year. Total sales for the third quarter were $171 million, up from $169 million in 2001. Camco recorded net income of $5.0 million on sales of $483 million for the first three quarters of 2002. Sales for the first three quarters of 2001 were $438 million, resulting in a net loss of $3.5 million. West Fraser Timber has reached an agreement with Daishowa Canada Co. to acquire Daishowa's interest in Quesnel River Pulp Co. , giving West Fraser 100% ownership of the joint-venture, which was formed in 1979. The terms of the agreement were not disclosed. The deal is expected to close on October 31, 2002.
James Jones has been appointed vice-president operations at Réno-Dépôt Inc. Formerly general merchandising manager, he replaces Marvin Ettinger … Filling the gap left by Jones's promotion, Joseph Piro has been promoted to general merchandising manager for the Building Box in Ontario, in addition to his duties overseeing Québec. (514-270-8111) Philip Orsino, president and CEO of Masonite International Corp., is the recipient of the 2002 Rotman Distinguished Business Alumni Award from the University of Toronto's Rotman School of Management. Orsino, a 1976 graduate of the U of T, heads up the world's largest manufacturer commercial and residential doors, with 70 facilities in 12 countries. In the past 12 years, sales have grown from $230 million in 1990 to an estimated $2.4 billion in 2002. (905-670-6500) John Costello has been hired away from his position as chief global marketing officer at Yahoo! to join Home Depot in Atlanta in the newly created role of chief marketing officer. Costello, a marketing and brand strategist, has more than 25 years of experience in consumer goods, retailing and technology. He will be responsible for Home Depot's worldwide marketing and advertising, branding and research, as well as working with senior leadership team on long-term growth strategies and report directly to Nardelli. Ian Cheshire has been appointed chief officer, international and development for Kingfisher plc. He has been with the company since 1998 as director of strategy and development. He reports to Francis Mackay, the company's non-executive chairman. Kingfisher's Castorama Group includes Réno-Dépôt in Canada.
Investment in non-residential building construction reached a record high in the third quarter, as the private and public sectors both increased spending, says Stats Canada. Overall, businesses and governments spent nearly $6.7 billion in the third quarter, up 3.5%. Manufacturer's shipments in August were up 0.6% to $43.9 billion, says Statistics Canada. However, the increase was largely due to higher fuel prices. The wood products industry increased as well, continuing to recover from recent lows.
A Canadian group stand will be exhibiting at the next DIY & Garden Show in London, England, in January. Now in its ninth year, the DIY & Garden Show is the UK's most important trade show for the home enhancement, DIY and garden sector, with all categories well represented - from decorating, hand and power tools, and timber and woodcare to shelving and storage, and garden and leisure. For more information, go to: www.diyandgardenshow.com.
If you are doing budget planning, developing next year's marketing plan, pitching a new client who needs hard data, a foreign head office that needs the definitive Canadian snapshot, in need of competitive intelligence, call Nancy Wright to find out more!
****HARDLINES MARKETPLACE**** Check out Hardlines Classifieds on the web: https://hardlines.ca/html/classifieds_new.asp HELP WANTED TERRITORY MANAGER Join an industry leader. As a Territory Manager for Unilock, you will have the responsibility for sales and promotion to an existing base of contractors and dealers, as well as consultants and consumers in a specific geographic area. Reporting to the Sales Manager, your territory takes in the eastern GTA, east to Ottawa. Preferential consideration will be given to those with a background in the construction and or the landscape industry. A proven sales track record in “cold calling” and prospecting for new business is a requirement, as the position involves calling on Landscape Supply Yards, Nurseries, Building Material Centers, and Lumber Yards. Your compensation package would include a base salary, incentive/bonus, and a benefits package including company pension plan. A Company car is provided. Please reply by mail, fax or email. No phone calls please. Unilock Ltd., 287 Armstrong Ave., Georgetown, Ontario, L7G 4X6 Attention: Mark Mossman. Email in MS Word, Text or PDF file attachment to: jobs@unilock.com or fax to (905) 874-3034 ************************************************************************************ REGIONAL MANAGER – WESTERN CANADA Torlys Inc. (www.torlys.com) is currently seeking a dynamic individual to take on a senior leadership role for Western Canada, taking on the responsibility of developing the sales team in Western Canada. The successful candidate for this position will thrive on the challenges of growing a business, and working closely with our business partners to introduce superior products in the specialty flooring category. We are seeking an individual who can visualize where the specialty flooring opportunities will be in their geographic region and establish the plans to make it happen within the Torlys team. Please reply in total confidence to Mary Kerr, Organizational Development Manager, Torlys Inc. (905) 696-2374 or by e-mail at mary@torlys.com. ************************************************************************************ INVITATION FOR OFFERS TO PURCHASE ASSETS OF THE VSTEP COMPANY INC. SF Partners Inc., in its capacity as Receiver of The VStep Company Inc. invites written offers to purchase the Receiver’s right, title and interest in the company’s assets, including : patents, inventory and tool and die. The VStep is a galvanized steel bracket used to build stairs for the “Do it yourself Market”. Written offers must be received by 5:00 p.m. on Monday, October 21, 2002. The highest offer will not necessarily be accepted. Interested parties should contact Angie Seruga-Baron at (416) 250-1212 to obtain more information. SF PARTNERS INC., Receivers & Trustees 400-4950 Yonge Street, Toronto, Ontario M2N 6K1 Telephone: (416) 250-1212, Facsimile: (416) 250-5083  ************************************************************************************ SERVICES OFFERED EXPERT DETAILING We know retail and what drives volume! Mike and Linda Smith, former owners of Dickson Pro Hardware in Toronto, are now located in Southeastern Ontario and are looking to service/detail/merchandise stores. Let us boost the impact of your products and programs instore. Contact us at 613.354.0038.   ***********************************************************************************  PACE CENTRAL: THE LEADING TECHNOLOGY FOR FACTORY AND AGENCY MERCHANDISERS. · Gain Accountability; Improve Execution · Reduce Costs; Improve Efficiencies · Seamless Communications - Schedules, Calendars, email · All information available on-line, all the time · Merchandisers use state-of-the-art Pocket PC's Visit www.pacecentral.com and contact Bryant Maude at 678.264.2403 or bmaude@enfoTrust.com to schedule your on-line demonstration.   *********************************************************************************** NORAL INSTORE: Don’t leave your products’ display management to chance! Let Noral Instore take care of your instore merchandising. Visit http://www.noralmarketing.com or call Al Vanderveen at 519-439-6800 ext. 201 ********************************************************************************** SELL YOUR COMPANY - OR BUY ONE - WITH HARDLINES CLASSIFIEDS! DO YOUR EXECUTIVE SEARCH, FIND NEW LINES OR GET NEW REPS IN THE HARDLINES MARKETPLACE. ONLY $18 PER LINE FOR THREE WEEKS! TO PLACE YOUR AD, CALL US AT 416-489-3396 OR EMAIL: bev@hardlines.ca
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